RBS cuts jobs, India operations to suffer

Thursday, April 09, 2009

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The Royal Bank of Scotland has decided to go on a retrenchment drive as a part of the ?2.5 billion costcutting drive. The sacking of so many thousands comes as figures show that the unemployment rate is rising faster.

There is no respite for bank executives, although thousands have already been declared redundant. The Royal Bank of Scotland (RBS) announced it was axing 9,000 jobs — 4,500 in UK back office operations that includes IT services, call centres and property management. The closure of call centres means job losses in India as well.

RBS said the proposed axing was part of its desperate £2.5 billion costcutting drive. Ironically, this happened just a day after it announced lucrative share option packages for directors at the group.

The bank, which is majority-owned by the government, said it had begun talks with the trade union Unite, which heavily criticised the move, over its plan to cut costs in its back-office operations “that will regrettably involve job losses.” The trade union’s national officer, Rob MacGregor, called the move “truly devastating”, adding, “These employees are totally blameless for the current position which RBS is in, yet they are paying for the mistakes at the top of the bank.” Stephen Hester, who was recruited to replace RBS’s disgraced chief executive Sir Fred Goodwin — draws a pension of over £7,00,000 a year — last year, said the strategy was designed to “restore the bank to standalone strength as soon as practicable”.

The sacking of so many thousands comes as figures show that the unemployment rate is rising faster than during previous recessions. The number of people seeking jobseekers’ allowance rose by 1,38,400 in February .